The Valuation of Auto & Recreational Vehicle Dealership Operations
This edition will be a resource of tremendous value. The book penetrates the dealership industry’s mystique and empowers you by revealing, in layman’s terms, the techniques for valuing automotive and recreational vehicle dealership businesses and their assets. No other book on the market covers all of these issues in one source. It is packed with spreadsheets, examples, forms and checklists which really work. The knowledge you will gain from this book is powerful. The book explains important terms and concepts clearly. Here you will easily understand not only how to value, sell or purchase any RV or auto dealership, but you will also discover:
> Franchising Agreements with Vehicle Manufacturers
> Service and Parts Sales Trends
> Typical Revenue and Expense Margins for Auto and RV Dealers
> Trade Organizations
> How to Analyze a Dealer’s Financial Statements
> Compare a Dealer’s Financial Ratios to the Industry
> How LIFO Reserves Affect Inventory Value
> Dealership Business Valuation Rules of Thumb
> Valuing the Real Estate of Dealerships
> Typical Equipment and Start up Costs for Dealerships
> Typical Equipment Installation Costs for Dealerships
> Business Acquisition Rates of Return
> Real Estate Cap Rates for Various Dealerships
> Red Flags to Watch out for
> And much more
Chapter 1 provides an Overview of the Auto and RV Dealership Industry. This chapter provides a comprehensive overview of the auto dealership industry and the rapid changes which are taking place in this industry. This chapter will focus on the history, trends, new and used car demand, supply of new vehicles, current renovation trends of facilities, automobile distribution channels and licensing competition, revenue streams in relation to service departments and sale of automobiles and, risks in the industry and the regulatory environment of the industry.
Chapter 2 Analyzes a Dealership’s Financial Statements & Operations. In this chapter the reader is provided a primer on basic financial statement ratio analysis, and an overview of adjustments for extraordinary and nonrecurring items. Although not as critical for larger businesses, these adjustments are crucial to understand when valuing closely held businesses. These are discussed in Table 2-23 on page 74. Finally, the addendum presents an invaluable Checklist of Important Items for Dealership Valuations on page 76.
Chapter 3 provides a Summary of Business Valuation Approaches. This chapter presents a summary of the various approaches to valuing a business. More importantly it presents an overview of which valuation technique is most useful, when comparing the values during a reconciliation.
Chapter 4 covers the Business Valuation of Auto/RV Dealerships. One of the most basic approaches to valuing a business is by looking at the balance sheet. It is challenging to accurately adjust the balance sheet s assets and liabilities to market values. This section focuses on the adjustments and nuances of making each adjustment. The market approach is one of the most typical methods used for establishing the value of an auto dealership business. The market approach is used frequently, because it is the easiest technique to understand. Most people understand multiples from the stock market as well as rules of thumb. This chapter also presents the advantages and drawbacks, and dangers of using rules of thumb. With respect to the income approach to valuing a business, this chapter is one of the most important sections in the book. All decisions are based upon cash flow, the most critical element to an auto or RV dealership s business value.
Chapter 5 discusses Asset Valuation for RV and Auto Dealerships (Real Estate). Real estate may sometimes constitute the largest component within the fixed asset category on a balance sheet. This chapter gives a critical primer in what to look for when accounting for the real estate asset or lease, as part of a dealership business acquisition or valuation. This chapter addresses the different types of auto dealerships, the leases, and typical methods of valuing the assets.
Chapter 6 discusses Auto and RV Dealership Asset Valuation (Equipment). Every business is sold with equipment. However, knowing how much the machinery and equipment are worth will assist the purchaser in determining the amount of goodwill that a buyer would pay for as part of the overall purchase price. These assets are different from real estate and intangibles, because their values can differ depending upon the specific circumstances under which they are being sold, e.g., liquidation value, going concern value. Sometimes the installation costs can be higher than the liquidation value. After understanding this chapter, you will be able to notice how radically a balance sheet can change, based upon the definition of value, as well as being able to calculate the differences in equipment values. The appendix presents all of the major references used with their addresses, websites where available, and telephone numbers.
Valuing, Buying & Selling Fast Food and Fast Casual Restaurant Operations
The Valuation of Movie Theater Operations